Mr. Cook's remarks, made at a Goldman Sachs technology conference Tuesday in San Francisco, were his first public comments about the suit, which was filed by Mr. Einhorn's Greenlight Capital Inc. last week in a New York federal court.

Greenlight's suit aims to stop the vote on an Apple proposal to require a shareholder vote to issue preferred stock. It alleges that Apple's proxy violates a rule of the U.S. Securities and Exchange Commission by bundling the preferred-stock provision together with other items.

Apple CEO Tim Cook called the company's proxy fight with a prominent investor a "silly sideshow" and defended the introductions of new products that might cannibalize existing wares. Jessica Lessin joins the News Hub. Photo: AP.

WSJ's Telis Demos has details of a novel plan from billionaire hedge fund manager David Einhorn that could create a windfall of cash for Apple investors. Photo: Getty Images.

More

"I find it bizarre we would find ourselves being sued for doing something that's good for shareholders," Mr. Cook said. "I think it would be a lot better use of funds to donate that time and money to a worthy cause."

Mr. Einhorn is pursuing the measure as he tries to prod Apple to return more of its $137 billion in cash to shareholders through a new preferred class of stock that would issue dividends.

Mr. Cook called the idea "creative" and said Apple is in "very active discussions" about returning more cash to shareholders. Last year, the Cupertino, Calif., company announced plans to return $45 billion over three years through a dividend and stock-buyback programs.

A spokesman for Greenlight responded by saying, "If Apple thinks the lawsuit is a waste of resources, it could simply end the matter by complying with existing law" by unbundling the proposed changes. On Tuesday, shareholder advisory firm Glass Lewis & Co. said it supported Apple's proposal. Glass Lewis said that it was "somewhat concerned" with the bundling of items in the proposal, however. Institutional Shareholder Services sided with Apple on the proposal last week.

Mr. Cook said the cash pile "is not burning a hole in our pocket" and the company has made an acquisition about every other month for the past three years. The deals tend to be small and related to controlling the "primary technology behind our products."

Apple has looked at large acquisitions, but "it didn't pass our test." He said Apple will likely look at large deals in the future, but aims to have a "disciplined and thoughtful" acquisition strategy.

"We don't feel a pressure to go out and acquire revenue," he said.

Apple shares were trading up about 1% during much of Mr. Cook's keynote interview Tuesday morning, but they fell afterward, ending down 2.5% at $467.90.

The stock has taken a hit after Apple last month reported slowing fourth-quarter revenue and profit growth. The results further fanned concerns about consumer demand for Apple's devices.

Some investors said Mr. Cook's remarks gave them confidence in the company's growth. "I liked his answers," said Morris Mark, president of Mark Asset Management in New York.

He said he was encouraged that Mr. Cook was "not dismissive" of Mr. Einhorn's proposal.

Mr. Mark said his firm sold a "material" amount of Apple stock last year, but lately has been holding or moderately increasing its position.

Mr. Cook grew animated when the conversation veered toward Apple's culture and innovation track record, repeating his oft-used phrase that innovation at the company "has never been stronger."

He played down concerns over iPhone market-share growth. He said only half of global wireless subscribers currently have access to the iPhone, leaving plenty of room for expansion.

Mr. Cook wouldn't detail whether Apple would consider making a cheaper version of the iPhone, especially for prepaid wireless customers in emerging markets. He stressed the company has taken steps to make products more affordable and highlighted its broad line of iPod media players that come in different models. "The only thing we will never do is make a crappy product," he said.

Mr. Cook said the company was surprised by the level of demand for the two-generation-old iPhone 4 in the fourth quarter. In the U.S., the device is generally free at wireless carriers when customers sign a two-year service contract, and supply was constrained for much of the period.

He also said Apple plans to invest heavily in its retail stores, which averaged more than $50 million in revenue per store last year. This fiscal year, Apple plans to expand the size of 20 stores and add 30 more world-wide. He said that when he needs a pick-me-up, he visits one of the company's stores, which he likened to "Prozac."

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.